Defining Moments

Back in 1994, amidst an ongoing fiscal crisis in Sweden and a ferocious bear market in government bonds, Christer Käck, at Skandia, was the biggest bond player in domestic Swedish bonds.

He was so sickened by the government’s lack of fiscal discipline that he announced that he was going to boycott government bond auctions. It was a defining moment. Back in 2002, amidst the deflation fear that prevailed at the time, Ben Bernanke made a speech that proved to be a defining moment. This is the parable according to Bernanke taken directly from his speech in November 2002. “Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no co...